Production Management in New Zealand: Is Education Relevant to
Practice?

Literature
Review

Green, Newsom, and Jones
(1977) surveyed American Fortune 500 companies to gather information on their use of
quantitative production and operations management (POM) techniques, and the barriers to their
use. Of the 19 techniques surveyed, only 7 were of frequent use or extensive use - network
analysis, inventory models, linear programming, time series analysis, regression and correlation
analysis, analysis of variance, statistical sampling. The main barriers to the use of quantitative
techniques were: benefits of using the techniques not being clearly understood by managers,
managers' lack of knowledge of the techniques, and managers not having been exposed to
quantitative techniques early in their training. All of these indicate that lack of knowledge is the
prime reason for not using the techniques.

Berry, Watson and Greenwood (1978) asked POM practitioners about
the frequency of use of 22 POM topics. Practitioners indicated appropriate educational coverage
for the topics. Academics provided information on current educational coverage of these topics
in introductory POM courses and on what the ideal coverage would be. The practitioners’
desired coverage matched their frequency of use of the topics quite closely. Similarly, the
academics were currently covering the topics pretty close to their ideal level. But there was a
wide divergence between the views of the practitioners and the academics. Practitioners would
allow two-thirds of the total time to concepts - oriented topics (and one-third to technique -
oriented topics). But the academics would allow about equal time to these different orientations.
Seven of the eight topics favoured by academics could be considered analytical techniques, while
nine of the eleven topics favoured by practitioners could be considered production concepts.
Possible explanations of this discrepancy offered by the authors were: practitioners’ lack of
familiarity with some of the analytical techniques, practitioners’ lack of understanding on how
some of the concepts such as human / monetary aspects are taught in courses without the POM
banner, ease of teaching / testing analytical techniques, students’ better response to analytical
techniques, or unavailability of concepts related teaching materials. Later, Berry and Lancaster
(1992) used a revised list of 22 production management topics to solicit views of practitioners
only. The new data again reinforced the importance of concept related topics to the
practitioners.

Two significant studies of qualifications, careers, and jobs of British
production managers have been reported (Lockyer and Oakland, 1983; Oakland and Sohal,
1989). Lockyer and Oakland (1983) found that production managers spent most of their time
(30%) in directly facilitating production. Improvements to processes and products and
labour/staff relations claimed the second (20.6%) and third (17.9%) slice of their time. Lockyer
and Oakland (1983) also demonstrated the lack of use of POM techniques. Economic order
quantity (57%), critical path analysis (52%), and classification and coding (50%) were the three
most frequently used techniques. This study reinforces the dissonance between the practice and
teaching of production management - POM techniques were not used in practice to a great extent.
The latter paper by Oakland and Sohal (1989) found that essentially the same condition prevailed
ten years later, although some improvements could be noticed, particularly in the education of
production managers. This latter report also pointed out the need for training production
managers in information technology, computer aided manufacturing, and finance and management
accounting.

For certain decision areas, the extent of responsibility of the production
managers, the extent of complexity and difficulty, and the proportion of time spent were
surveyed by Wild (1984). The highest extent of responsibility were in the areas of work design,
quality assurance, factory layout, capacity planning, and productivity. Production managers
found decision making in the areas of productivity, capacity planning, and process design the most
complex. They spent the most of their time in the areas of productivity, capacity planning, and
production control. They reported that they needed to interface most with the departments
dealing with human resource, marketing, and design. They pressed the highest emphasis on skills
in managing people ahead of problem solving skills and technical skills. They thought skills in
analytical/quantitative techniques, which are emphasised by POM curriculum, were lower in
importance. In the future, they saw computers, manufacturing automation, and productivity
improvement as affecting their job the most. Wild's study, although a little dated, showed the
curriculum areas on which production management instructors should stress most - people skills,
productivity measurement and improvement, work design, quality, layout, capacity planning, and
production control, and inter-functional issues with marketing and design. Studies done in India
(Mohanty and Nair, 1987) and Singapore (Tan, 1990) essentially reinforced Wild's (1984)
findings in United Kingdom, although there were few differences in emphasis.

In a survey of British manufacturing industry, Oakland and Sohal
(1987a, 1987b) examined the usage of POM techniques and barriers to the acceptance of these
techniques. The top five traditional techniques were: budgetary control, payback period, return
on investment, standard costing and reorder level stock control; and the top five OR/statistical
techniques were: stock control based on reorder level/cycle, forecasting, economic order quantity,
statistical sampling and experimental design. The top three barriers to use of both kinds of
techniques were: No knowledge, not applicable, and successful without using the technique.
Significantly, more than half the respondents did not use more than half of the techniques
surveyed, and as for most of the people who did not use the techniques much, they either did not
know the techniques or if they knew, did not think the technique was applicable. This certainly
brings into sharp focus the question of relevance of POM techniques. However, rather than
questioning the relevance of POM techniques per se, the authors suggest teaching the techniques
in a way that would illustrate their applicability and benefits. This study also sought to establish
the relationship between previous POM training and technique usage. It concluded that POM
training was a significant factor in the usage of techniques.

Malhotra (1996) points out that the current focus of modelling
methodology in the POM discipline has narrowed the relevance of POM teaching and research.
He has suggested five approaches to make POM teaching and research more relevant. He stresses
the need for empirical research with an emphasis on strategic decision making in POM, along the
lines of other social science research. Traditional modelling research should be rooted in practice;
the POM research and curricula need to be more internationalised in the face of growing
globalisation; POM teaching should move away from the narrow functional outlook to a more
cross-functional perspective; journal editors and reward systems should encourage more relevant
POM research. The increasing importance of international pedagogy was pointed out also by
Schmenner (1995).

Production management in New Zealand

Very few published studies of production management practices in
New Zealand are available. Turner and Radford (1981) essentially replicated the study of the
production manager done in the UK (Lockyer and Oakland, 1983). In comparison to the British
production manager, the New Zealand production manager was found to control fewer
subordinates, but to be responsible for a wider variety of functions. The New Zealand production
executive was more happy with their job than their British counterpart. While the British study
lamented the educational levels of the British production manager, the educational level of the
New Zealander was found to be even lower. Thus Turner and Radford (1981) make a plea to
provide further training to production executives.

Daellenbach (1975) in his survey of the penetration of operations
research in New Zealand found that the top application areas were: inventory control, sales
forecasting, production planning and scheduling, and critical path scheduling; all of which are
applicable to production management.

Corbett (1991), as part of the global manufacturing futures survey,
assessed the competitive priorities and perceived strengths of New Zealand manufacturers. The
results of NZ survey were compared with other international surveys. He found that, in general,
NZ manufacturers have similar competitive priorities to the other countries that were surveyed.
The NZ respondents perceived their price and performance as weak areas. Corbett and Bayly
(1991) surveyed just-in-time (JIT) implementers in New Zealand to determine the perceived
benefits, success factors, and problems related to JIT implementation. The respondents reported
the implementation as beneficial to them in many respects, but it needed hard work and
commitment. They did not find it suitable for all manufacturing operations, specially where
overseas suppliers were involved. This survey targeted known JIT implementers. Hyde, Basnet
and Foulds (1995) concluded from their survey of New Zealand manufacturers that the prevalence
of world class manufacturing practice was low, although some exceptions existed. The low
educational levels of the work force and their supervisors, and the isolation of New Zealand were
seen as formidable barriers to the diffusion of world class practices in manufacturing.

In a survey of tertiary operations management programmes in New
Zealand, Robb and Heyl (1996) lament that few papers were dedicated to areas such as
time-based competition, flexibility, new product / service development, process improvement,
project management, and international operations management. However, they believe that the
university faculty were responsive to the demands for skills in modelling, problem solving / critical
thinking, strategic thinking, and group work.